States Fail At Mental Health

Rachel Kemel
Associate Editor
Loyola University Chicago School of Law, JD 2020

The Mental Health Parity and Addiction Equity Act (“the Parity Act”) is a federal civil rights and consumer protection law. The Parity Act prohibits most public and private insurance plans from imposing more restrictive standards on mental health (“MH”) and substance use disorder (“SUD”) benefits than they impose on similar medical/surgical benefits. However, ten years since its passage, states have failed to appropriately enforce the Parity Act.

The Parity Act

The Parity Act was passed in October 2008 and took effect in January 2010. It was created to fill in the gaps left by the Mental Health Parity Act. The main purpose of the Parity Act is to prevent group health plans and health insurance issuers that provide mental health or substance use disorder (MH/SUD) benefits from imposing less favorable benefit limitations on those benefits than on other benefits. While the Parity Act is a federal law, it is primarily enforced by the states. Some states have supplanted the Parity Act with state law. The federal government intervenes for self-insured plans.

Mental Health in the US

Most Americans lack proper medical mental health care. In fact, 56% of Americans with a mental illness do not receive treatment. Approximately 1 in 5 adults live with a mental illness, and nearly 1 in 25 adults live with a serious mental illness in America. In 2016, only 1 in 10 adults who needed substance use treatment were able to access it at a specialty facility. Approximately 10.2 million adults have co-occurring mental health and addiction disorders.

How Have States Failed?

A decade after the Parity Act’s approval, there was an evaluation done to determine states’ effectiveness in enforcing the Parity Act and their coverage for mental health/SUD treatment. Illinois performed the best out of all the states, receiving a 100% on the survey. Texas took second place with a 79%.

After reviewing a group of five states (Illinois, Maryland, New Jersey, New York, and Ohio), there were a number of common problems identified: lack of effective enforcement tools; an ineffective complaints process; lack of awareness about the Parity Act and the rights it affords; insufficient patient access to treatment, and, lack of political will to strengthen enforcement.

First, state insurance regulators rely on traditional tools to enforce parity for state-regulated commercial plans, which are reactive and tend to be insufficient for parity enforcement. States have adopted strong individual parity laws; however, these laws are not being properly enforced according to the study. Second, the primary issue appears to be that penalties for violations are not severe enough to compel compliance. Third, the main enforcement tool among most states appears to be consumer complaints. However, this is often ineffective because consumers tend to be unaware of the Parity Act, the rights it affords, or how to exercise those rights even if a state has straightforward systems for consumers to file complaints. Not only are patients often unaware of how the Parity Act works, but providers are often unfamiliar with the act. Fourth, lack of proper enforcement could be leading to violations restricting MH/SUD treatment access. Finally, there is very little political concern about imposing additional regulatory requirements for parity.

What Have States Been Doing to Improve?

In the past year, five states passed laws to try and improve compliance with parity laws. Colorado was the first on May 2017 with HB 18-1357, which requires the commissioner of insurance to report on compliance, establishes an office to assist residents in accessing BH care, and sets aside $94,000 to implement the bill. Delaware passed SB 230 in August 2017, which sets annual reporting requirements for insurance carriers on their coverage for BH and SUD. In August 2017, Illinois passed SB 1707, which will require health plans to submit parity compliance analyses to the Illinois Department of Insurance and the Illinois Department of Healthcare and Family Services. It also requires expanded access to SUD treatment and that departments perform market-conduct examinations and parity compliance audits and then report enforcement annually to the General Assembly. Finally, it closed a loophole in Illinois law that allowed school health plans to discriminate against MH and SUD. New York A3694A relates to establishing the MH and SUD parity report act to ensure compliance of insurers and health plans with state and federal requirements for the provision of MH  and SUD treatment and claims. Tennessee Public Chapter 1012, which goes into effect in January 2019, will implement and enforce provisions of the Parity Act and require the Tennessee Department of Health to issue a report, no later than January 31, 2020, regarding compliance with the Parity Act.

What Should States Do Going Forward?

Having the Parity Act does not help Americans unless the law is being properly enforced. States should start to consider MH services as part of the “physical” health conditions to ensure that it is being properly covered and prioritized as other physical diagnoses. Congress has to start working towards more affordable and accessible mental health services. Both the state and the federal government must work towards improving mental health.